EERE Technology Commercialization and Deployment Programs

Craig Tyner, Sandia National Laboratories

Tom Brennan, ARCH Venture Partners

STEAB April 2008 Meeting

Albuquerque, NM

April 9, 2008

Industrial Partnerships and Strategy

Helping Sandia � achieve its strategic objectives Technology Commercialization

� fulfill its mission

Licensing Intellectual Property � build constituencies

Agreements Partnership Development � generate revenues

Business Intelligence Business Planning

Market Analysis International Partnerships Craig E. Tyner Entrepreneurial Small Business

Science and Technology Park

cetyner@sandia.gov 505-844-3340

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Energy Policy Act of 2005

Tech Transfer Requirements Title X/Sec 1001:

Improved Technology Transfer of Energy Technologies

� Technology Transfer Coordinator •Principal advisor to DOE Secretary on technology transfer and

commercialization matters, overseeing � Technology Transfer Working Group � Technology transfer funding � Private sector engagement, including venture capital firms

� Technology Transfer Working Group •Coordination of TT activities at National Labs •Exchange of TT practices information •Dissemination TT information to the public and prospective

technology partners � Energy Technology Commercialization Fund

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Energy Policy Act of 2005 Technology Commercialization Fund

� Directs that 0.9% of DOE funding for applied research, development, demonstration, and commercial application be used to

“Provide matching funds with private partners to promote promising energy technologies for commercial purposes”

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� EERE’s Implementation •Venture Capital Technology

Showcase •Technology Commercialization

and Deployment Fund (TCDF) •Entrepreneur in Residence (EIR)

The EERE Commercialization Team is building four bridges across the “Commercialization Valley of Death”

• Talent

– DOE traditionally hires scientists – not businessmen – Developing technologies requires different skill sets than

building businesses • Information

– Commercialization is impossible if a businessman never learns of a technology

– Effective communication is a fundamental prerequisite of commercialization

• Capital

– Competition is stiff for venture capital funding – Venture capitalists are more likely to fund business plans and

prototypes than research papers 6

The Venture Capital Technology Showcase introduced leadinginvestors to the most commercially promising EERE technologiesdeveloped

Need • Many EERE funded technologies stall in the “commercialization valley of death” simply because the innovation

has not been clearly communicated to the business community

Structure • Challenged EERE Program Managers to identify 8-10 most promising technologies in their portfolio • Created simple, layman’s descriptions of the innovation opportunity • Invited prominent venture capital firm to come to Washington DC for a 2-day conference full of technology

presentations

Venture Capital Firms Represented

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NREL:$4,000,000

Sandia:$700,000

Oak Ridge:$2,500,000

TCDF is designed to provide funding for highly-focused projects that move early-stage technologies past the R&D stage byremoving specific commercialization hurdles. Need • Innovations struggle to find financing post-research and pre-venture capital funding as described by the

“Commercialization Valley of Death”

Structure • 50-50 industry matched funds required to participate • Designed to complement angel investment, venture capital series A financings or early stage corporate product

development • Funds restricted to prototype development, demonstration and deployment – not further basic science research • Rolling basis funding decisions

Decision criteria • Potential market opportunity • Likelihood of commercial success • Management team • DOE priorities • Private sector partners

NREL: $4,000,000

Sandia: $700,000

Oak Ridge: $2,500,000

FY07 TCDF Funding

Mines Lab IP and drafts

business plans

Hires, funds and mentors EIR

The Entrepreneur in Residence (EIR) program will bringbusiness talent along side research scientists to amplify andaccelerate the market impact of energy innovation

TechnologyNeed • Researching innovative technologies requires a vastly

different skill set than creating new businesses. National laboratories traditionally employ research scientists who Fundable excel at delivering research reports, white papers and Business patents rather than a business plans. Team Market

NationalNational LaboratoryLaboratory Structure

Partners with VC firm to sponsor EIR

Venture CapitalVenture Capital FirmFirm

• DOE partnership with Venture Capital Firm • EERE will provide $100k and full access to selected labs • Pre-negotiated standard equity share license agreement • Venture Capital Firm will identify, hire, manage and mentor

“best-of-breed” EIRs • 2008 EIR Pilot National Laboratories:

• National Renewable Energy Laboratory (Golden, CO) • Oak Ridge National Laboratory (Oak Ridge, TN) • Sandia National Laboratory (Albuquerque, NM)

Entrepreneur inEntrepreneur in ResidenceResidence

DiscoverDiscover EvaluatEvaluat ee PlPl anan SpinoutSpinout BuildBuild 9

Entrepreneur-in-Residence Program

� Winning VC firms announced Feb 27 by the Ass’t Secretary •NREL (Kleiner Perkins Caufield & Byers) •Oak Ridge (Foundation Capital) •Sandia (ARCH Venture Partners)

� EIR Objective: Identify promising EERE-related technologies and spin out start-up company(ies) to commercialize those technologies •Fairness-of-Opportunity met by competitive solicitation

(allowing exclusive licensing) •Technologies across the EERE space available to the EIR

under terms of the solicitation •Direct researcher/EIR interactions on a daily basis

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Entrepreneur-in-Residence Program

� Extended briefing for ARCH on March 18 •Sandia’s EERE and Partnerships programs

� Sandia’s EIR is Tom Brennan •Former Sandia Member of Technical Staff (and former EIR) •Successfully spun out Sandia technology in the past •Started March 31

� Regular updates with DOE and other labs on EIR Progress

� Ancillary benefit for Sandia •Feedback to Sandia’s TT programs – what works, what doesn’t

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